Why in news?

India and the United States have initiated the Transforming Relationship Utilizing Strategic Technology (TRUST) initiative to enhance cooperation in the recovery and processing of critical minerals, including lithium and rare earth elements (REEs).

Announced during the PM Modi’s recent visit to Washington, this partnership aims to strengthen supply chains for these essential materials.

What’s in today’s article?

• India-US TRUST Initiative: Strengthening Critical Minerals Cooperation
• Trust Initiative: Building on National Programmes for Critical Minerals
• Significance of TRUST Initiative
• Importance of Critical Minerals and Rare Earth Elements (REEs)

India-US TRUST Initiative: Strengthening Critical Minerals Cooperation

• India and the United States launched the Transforming Relationship Utilizing Strategic Technology (TRUST) initiative to enhance bilateral cooperation in critical and strategic minerals, advanced materials, and pharmaceuticals.
• Key Objectives
  • Reducing Barriers to Technology Transfer – Streamlining regulations to facilitate innovation and trade.
  • Addressing Export Controls – Ensuring smoother commercial exchange of strategic resources.
  • Enhancing High-Tech Commerce – Strengthening collaboration in cutting-edge sectors.
• Focus on Critical Minerals
  • A Recovery and Processing Initiative will be launched for strategic minerals like lithium and rare earth elements (REEs) to boost supply chains.
  • This move aims to counter China’s dominance in the global critical minerals market.
• Alignment with Global Frameworks
  • TRUST builds upon India’s participation in the US-led Minerals Security Finance Network and its induction into the Minerals Security Partnership (MSP) in 2023.
  • Unlike multilateral frameworks, TRUST focuses on bilateral engagement, enabling faster execution and deeper collaboration.

Trust Initiative: Building on National Programmes for Critical Minerals

• TRUST initiative builds upon existing national programmes in India and the US that focus on exploration, recycling, and R&D in processing technologies.
• US Initiatives
  • Critical Minerals and Materials (CMM) Programme (2020) – $675 million allocated to diversify supply chains and promote a circular economy.
  • Battery and Critical Mineral Recycling Programme (2024) – $125 million in grants for R&D to enhance battery reuse and recycling.
• India’s National Critical Minerals Mission
  • Approved in January 2024, with a Rs 16,300 crore budget for seven years.
  • Rs 7,000 crore allocated for critical mineral exploration.
  • Rs 1,500 crore set aside for an incentive scheme to support recycling efforts.
• Comparison with iCET Initiative
  • In 2022, India and the US launched the Initiative on Critical and Emerging Technology (iCET) to collaborate on semiconductors, AI, and wireless communication, mainly for defence and security.
  • The TRUST initiative has a broader focus, covering critical minerals and supply chains beyond just technology applications.

Significance of TRUST Initiative

• Unlike previous multilateral partnerships, however, the TRUST initiative will build on bilateral engagement.
• Strategic Significance
  • The initiative strengthens India-US strategic ties, ensuring resilience in critical supply chains.
  • It accelerates joint efforts in exploration, extraction, processing, recycling, and recovery of essential minerals.
  • TRUST marks a major milestone in India’s goal of becoming self-reliant in critical mineral resources.
• Expanding Innovation Through the TRUST Initiative
  • The TRUST initiative will foster collaboration between governments, academia, and the private sector to accelerate innovation in key fields, including:
    • Defence; Artificial Intelligence (AI); Semiconductors; Quantum Computing; Biotechnology; Energy and Space
• Strengthening Pharma Supply Chains
• The initiative aims to enhance the pharmaceutical supply chain, focusing on active pharmaceutical ingredients (APIs) that rely on critical minerals like lithium, magnesium, zinc, and selenium.
  • In 2023, pharmaceutical products accounted for 21.9% of India’s $20 billion consumer goods exports to the US.
  • However, the sector faces risks due to potential tariffs that could be imposed by the Trump administration.
• India, the world’s second-largest API manufacturer after China, could benefit from securing these essential minerals.
• Strengthening Bilateral Cooperation
  • The initiative aims to deepen India-US collaboration in critical minerals by:
    • Reducing barriers to technology transfer
    • Addressing export controls
    • Enhancing high-tech commerce
  • While the initiative falls short of giving Indian companies tax benefits from the US Inflation Reduction Act (IRA) for battery components and critical raw materials, it still broadens the scope for collaboration significantly.
    • Japanese companies enjoy this benefit.

Importance of Critical Minerals and Rare Earth Elements (REEs)

• Essential for Strategic Industries
  • Critical minerals and REEs play a key role in industries such as:
    • Defence (missiles, fighter jets, radars)
    • Semiconductors and AI hardware
    • Quantum computing
    • Energy storage and electric vehicles (EVs)
    • Biotechnology and medical diagnostics
    • Space technology
• Key Elements and Their Applications
• Neodymium, praseodymium, samarium – Used in high-performance magnets for defence systems.
• Lithium, cobalt, nickel – Power advanced batteries for energy storage and EVs.
• Gallium, indium – Critical for semiconductors and AI hardware.
• Ultra-pure silicon, superconducting materials – Essential for quantum computing.
• Europium, terbium – Used in biotech imaging and medical diagnostics.
• Scandium and heat-resistant alloys – Important for space technology.
• The Need for Diversified Supply Chains
  • China controls nearly 70% of global REE production and much of the processing infrastructure.
  • Securing diversified supply chains is crucial for technological sovereignty and national security.